The Federal Government, the 36 states and the 774 local government councils shared N3.007tn from the Federation Account as revenue for July 2026. The allocation followed a rise in statutory revenue, which increased by N658.087bn during the month. The Federation Account Allocation Committee approved the disbursement at its August meeting held in Owerri, Imo State.
A statement issued by the Director of Press and Public Relations in the Office of the Accountant-General of the Federation, Bawa Mokwa, said gross statutory revenue rose to N4.359tn in July. The figure represents an increase of N658.087bn, or 17.8 per cent, from the N3.700tn recorded in June.
The increase reflected stronger collections from several oil and non-oil revenue sources. However, gross Value Added Tax revenue recorded a slight decline. VAT fell to N793.968bn in July from N799.746bn in June. That represents a decrease of N5.778bn, or 0.7 per cent.
The FAAC communiqué said several revenue sources recorded increases during the month. They included Petroleum Profit Tax, Hydrocarbon Tax, Companies Income Tax, Capital Gains Tax and Stamp Duty. Petroleum royalties, mineral royalties, excise duty and gas flaring penalties also recorded gains. The committee, however, recorded declines in VAT, import duty, Common External Tariff levies, gas flaring fees and miscellaneous oil revenue.
The statement said, “In its regular monthly business, FAAC approved the disbursement of a total of N3.007tn to the Federal Government, the 36 State Governments and the 774 Local Government Councils as revenue for July 2026.” It added that the revenue figures pointed to a stronger revenue base, with statutory collections rising by 17.8 per cent during the month.
“Gross statutory revenue rose to N4.359 trillion in July 2026, up N658.087bn, a 17.8 per cent increase, from N3.700tn in June 2026, reflecting improved collection performance across oil and non-oil statutory sources,” the statement said.
FAAC pushes for stronger revenue management
The committee said it would continue working with revenue-generating agencies to improve collections and reduce revenue leakages. Bawa said the government must also strengthen remittance discipline across its revenue-generating agencies. The development comes amid higher Federation Account revenues following major fiscal reforms. These include the removal of the petrol subsidy, foreign exchange reforms and efforts to expand the tax base.
The Owerri meeting also focused on how the three tiers of government could turn higher allocations into long-term economic gains. Finance commissioners and accountants-general attended the meeting, which took place alongside the National Council of Federation and Economic Development.
Officials discussed the fiscal health of the federation and ways to improve the financial strength of states and local governments. Bawa said officials identified six key areas that could improve fiscal performance. They include better internally generated revenue, stronger management of public assets and increased economic activity.
Other areas include attracting private capital, investing in human capital and improving transparency in public finance. States were also encouraged to create proper asset registers and verify their payrolls. The committee further urged states to publish their audited accounts on time.
New VAT sharing formula takes effect
The meeting also reviewed changes introduced by the Nigeria Tax Act 2025, which took effect on January 1, 2026. Under the new arrangement, the states’ share of VAT revenue increased from 50 per cent to 55 per cent. The Federal Government’s share, however, dropped from 15 per cent to 10 per cent. The new framework also provides that 30 per cent of the states’ VAT pool should be shared based on the location where goods and services are consumed.
The change is expected to give states more incentive to attract businesses and expand economic activity within their territories. The committee also reaffirmed its commitment to the full and timely remittance of revenue collected by Ministries, Departments and Agencies. It said the government must reduce its dependence on crude oil by developing other revenue sources. Solid minerals and other non-oil royalties will therefore remain areas of focus as the government seeks to build a stronger revenue base.
FG, states urged to invest rising revenue
The committee said sustaining the revenue gains recorded in July would depend on better collection and remittance by government agencies. It noted that the challenge was no longer only about sharing higher revenues. Governments must also ensure that additional funds support productive investments.
The investments, it said, should strengthen public finances and improve living standards. The committee therefore urged the Federal Government and state governments to use the current increase in revenue to strengthen fiscal reforms. It also called for measures that would make Federation Account allocations more predictable and support long-term economic growth.
The statement concluded, “The Committee noted that sustaining the statutory revenue gains recorded in July 2026 will depend on continued discipline in collection and remittance across Ministries, Departments and Agencies, and reiterated its support for reforms aimed at improving the predictability and growth of allocations to all three tiers of government.”
Read also: Dangote’s Dollar Fuel Sales Get Backing Under PIA
